TORONTO–(BUSINESS WIRE)–Canadian Pension plan investments witnessed modest gains during the third quarter as both stock and bond markets responded to the magnitude and pace of interest rate hikes around the globe, according to the Northern Trust Canada Universe. The median Canadian Pension Plan returned 0.76% for the quarter and -14.75% year to date as of September 30, 2022.
The third quarter was marked by increased market volatility triggered predominantly by persistent inflation and the willingness of monetary policymakers to bring it under control. The U.S. Federal Reserve (Fed) continued its unwavering journey to stem inflation with aggressive hikes to its Federal Funds Target Rate. In turn, the U.S. dollar strengthened relative to other global currencies, reinforcing its status as the “safe haven” asset.
Major central banks across the globe followed a similar tightening direction, spurring fears the battle against inflation would prompt an economic recession. The UK government’s announcement of an unfunded fiscal package, subsequently countered by Bank of England intervention, put further pressure on global bond markets late in the quarter. Despite the restrictive monetary policy environment, North American equity markets held up reasonably well, led by the U.S., relative to global peers. The overall Canadian bond universe closed the quarter with a small gain.
“Measures taken by central banks to restore equilibrium across the global economy…
